The Most Important Retirement Table You’ll See


I was recently talking to a friend who is in her mid-40s and who, despite working full-time most of her adult life, still has a dime on her IRA or 401(k) plan. Said he wasn’t saving.. Her spouse, on the other hand, makes minimal contributions to his work 401(k) and I don’t know his exact savings percentage, but my friend confirmed that they were only putting in enough money to get what their employers were offering.

When I asked a friend why she and her spouse weren’t saving more for retirement, her answer was something like, “Well, I don’t think we need to.” When I pushed harder, she told me my retirement expenses would be a lot cheaper.

A person with a laptop.

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At that moment, I felt like I needed to give her a stern wake-up call. I explained that I had cut a lot of my bills at times, but I explained that I was still looking at a lot of costs that would most likely be just Social Security alone.

I don’t know if I fully persuaded her to talk to her spouse and put her on the savings front, but still she and her husband are already in the middle of their careers. Years of lost opportunities to build wealth.

If you’re young reading this, you might want to start prioritizing retirement savings at an early age, contrary to what my friend and her husband are doing. You can get more wealth in the future.

Investment window matters

The more time you invest in your IRA or 401(k) plan, the bigger the nest egg tends to be. And you might really need a bigger nest egg to cover a lot of your retirement money.

For example, you can contribute $300 to your retirement savings plan each month, and you invest that money with an average annual return of 8%. This is slightly below the stock market average. Depending on how many years you want to save, here’s the savings balance you’re considering for retirement:

Savings Window ($500 monthly donation)

Ending balance*

20 years


25 years


30 years


35 years


40 years


45 years

$1.39 million

50 years

$2.065 million

*Totals are approximate. Calculations by the author.

The reason the table ends at age 50 is that many people start working full-time for the first time in their early 20s, and until then they are unable to steadily accumulate retirement benefits. In other words, he is 50 years old for someone who works until his early 70s.

Importantly, though, a longer savings and investment window could set you up for a much more comfortable retirement. So you may spend your money on other things, and while you may not think it’s important to save for retirement from a young age, it’s a fact.

By the way, I went through a few years in my early 20s when I didn’t pay for retirement. At the time, I was busy building up an emergency fund and paying off the loans I took to get my degree, but I’ve been steadily funding an IRA or 401(k) plan since his mid-twenties. and will continue to do so for as long as I can earn a paycheck.

If you’re already in your 20s and haven’t started saving for retirement yet, don’t panic. But good luck and start early. And if you’re older, or like my friend is in his 40s, reconsider your budget to make room for contributions to an IRA or 401(k). Your future really depends on it.

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